Which student loan plan are you on?
The UK currently runs several student loan plan types side by side: Plan 1 (mostly pre-2012 English and Welsh starters, and some Northern Ireland borrowers), Plan 2 (English and Welsh students who started university between 2012 and 2023), Plan 4 (Scottish students), Plan 5 (English students starting from academic year 2023/24 onwards) and the Postgraduate Loan (PGL) for master's or doctoral study. Each plan has its own repayment threshold and, in some cases, a different repayment rate, so two graduates earning the same salary can have very different deductions depending on when and where they studied.
Your plan type is set by the Student Loans Company when your loan is issued, and it's recorded through HMRC's PAYE system via your employer. If you're not sure which plan applies to you, your annual statement from the Student Loans Company or your online account will confirm it, and this is worth checking before you rely on any repayment estimate, including the examples below.
How the threshold and repayment rate work together
Student loan repayments are not like income tax bands, where different slices of income are taxed at different rates. Instead, once your income crosses the relevant annual threshold, you repay a flat percentage of everything you earn above that threshold. For Plan 1, Plan 2, Plan 4 and Plan 5, the standard repayment rate is 9% of income above the threshold. The Postgraduate Loan has its own threshold and is repaid at 6% of income above that threshold, and if you have both a Plan loan and a PGL running at the same time, both deductions can apply together.
Because thresholds and rates are reviewed and can change between tax years, the exact figures for 2026/27 should always be checked against the official GOV.UK repayment threshold page or your Student Loans Company account rather than assumed from a previous year's figures. What stays consistent, however, is the mechanism: PAYE calculates your student loan deduction on each pay period based on how much you're paid in that period, not a simple one-twelfth of your annual salary, which is why bonus months or overtime can trigger a noticeably larger deduction than usual.
Why your payslip deduction can look uneven
Because student loan repayments are worked out per pay period rather than smoothed across the year, someone paid monthly who receives a large bonus in one month may see a much bigger student loan deduction that month, even if their annual salary would suggest a smaller average repayment. The same applies to irregular overtime, commission payments or a one-off pay rise partway through the year. This is normal and is how HMRC's PAYE system is designed to work, rather than an error, though it can be confusing if you're trying to budget around a consistent monthly take-home figure.
This is one of the reasons it helps to model your expected repayments using a proper calculator rather than dividing your annual salary by twelve. A tool that applies the correct plan threshold and rate to your actual pay pattern will give you a far more realistic picture of what lands in your bank account each month, particularly if your income varies.
Worked example: comparing take-home pay across plans
Consider two graduates, both earning a gross salary of £34,000 a year, one on Plan 2 and one on Plan 5. Because Plan 2 and Plan 5 have different annual thresholds, the amount of income sitting above the threshold - and therefore subject to the 9% deduction - differs between them, even though their gross pay is identical. The graduate on the plan with the lower threshold will see a larger student loan deduction each month, all else being equal, simply because more of their salary sits above that plan's threshold.
This is exactly the kind of comparison a take-home pay calculator handles automatically, factoring in the correct plan threshold alongside income tax and National Insurance so you can see a genuine net figure rather than trying to layer several separate calculations together yourself. Running your own salary and plan type through such a tool is a much more reliable way to budget than relying on rules of thumb from friends or colleagues who may be on a different plan.
Voluntary repayments and overpaying
Some borrowers choose to make voluntary extra repayments toward their student loan, particularly if they're close to the point where interest is outweighed by capital repayment, or if they simply want to clear the balance faster. Whether this makes financial sense depends heavily on your plan type, your interest rate, your income trajectory and whether your loan is likely to be written off before you'd otherwise repay it in full, since unpaid balances on most plans are written off after a set number of years rather than pursued indefinitely.
Before making voluntary repayments, it's worth checking the write-off terms for your specific plan on GOV.UK, since paying off a loan early that would have been written off anyway is rarely the best use of your money. A financial adviser or the Student Loans Company can help clarify your specific position if you're unsure.
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FAQ
Frequently asked questions
Short answers first. Open the question if you want the detail behind the result.
How do I know which student loan plan I'm on?
Check your annual statement from the Student Loans Company or log into your online account, which will state your plan type. Your employer also reports deductions to HMRC under a specific plan type, so your payslip or HMRC personal tax account may also reflect this.
Do I repay my student loan if I'm self-employed?
Yes. If you're self-employed, student loan repayments are calculated as part of your Self Assessment tax return based on your profits, using the same thresholds and rates as employees on your plan type, rather than through PAYE.
Can I have more than one student loan plan at once?
You can have a Postgraduate Loan running alongside a Plan 1, 2, 4 or 5 loan if you took out further borrowing for postgraduate study. In that case, both deductions are calculated separately and can be taken from your pay in the same period.
Does student loan interest keep adding up even while I'm repaying?
Yes, interest typically continues to accrue on the outstanding balance throughout the life of the loan, and the rate depends on your plan type and, in some cases, your income. The official GOV.UK repayment pages set out the current interest rate for each plan.
Sources
External links open the official source used to review this guide.